(Bloomberg) — Contracts for US stocks fell and stocks in Asia fell as investors waited for key data for clues about the Federal Reserve’s rate hike campaign.
Most read by Bloomberg
US stock futures slid as investors eyed Friday’s release of the Personal Consumption Spending Index — the Fed’s preferred price gauge — which is expected to accelerate amid robust income and spending growth.
Euro Stoxx 50 futures pointed to gains after shares were little changed at Thursday’s close.
In Asia, a stock indicator fell and was on course for a fourth straight weekly decline, the longest losing streak since September. Hong Kong-listed tech stocks led the decline after results from e-commerce giant Alibaba Group Holding Ltd. , with analysts remaining cautious on the company’s revenue prospects.
Japanese markets were in the spotlight, with Friday’s data showing accelerating inflation as the government-nominated president as the next central bank governor faced his first cricket in parliament.
The yen fluctuated against the greenback after Kazuo Ueda told lawmakers he saw inflation peaking. He said the current monetary easing is appropriate but added that the central bank could move towards normalization if stable inflation at 2% is on the horizon.
“Policy normalization is underway at the BOJ, but it will be a very gradual and cautious process, even with a new governor at the helm,” said Alvin Tan, head of Asia FX strategy at RBC Capital Markets in Singapore . As a result, the yen is likely to be trading in a range for the moment, driven more by the direction of the broad US dollar and US bond yields in the near term, he said.
The story goes on
The dollar was little changed against most major currencies and the benchmark 10-year Treasury seemed poised to continue its climb into day three.
According to Bloomberg Economics’ Anna Wong, the acceleration shown by the PCE index would contribute to a set of unfavorable numbers that suggest the central bank will keep interest rates at 5.25% for some time. The current benchmark is in a range between 4.5% and 4.75%.
Investors should continue to expect volatility to hit the market when the PCE data comes in, as each data point will be scrutinized, said Altaf Kassam, EMEA head of investment strategy and research at State Street Global Advisors. “But we think the trend is generally favorable. Disinflation is happening, growth has been pretty strong and we should come out of it without a hard landing,” he said on Bloomberg Television.
Adani Outreach
Adani Group will hold a roadshow for fixed income investors in Asia next week. The Indian conglomerate is increasing its reach for investors after its bonds and shares plunged following a critical report by short seller Hindenburg Research released last month.
Meanwhile, German chemicals company BASF SE announced that it has decided to prematurely end a share buyback program due to profound changes in the global economy.
In commodities, oil extended Thursday’s rise as it endured its longest losing streak since December amid strength in commodity currencies and signs of risk appetite. Gold ticked higher.
Elsewhere, Bitcoin was on track for its second monthly surge, breaking with stocks and other riskier assets that have slipped amid renewed concerns about rising interest rates. The rally in the crypto market is making up only a fraction of the ground lost last year when prices fell and the collapse of the FTX exchange caused investor retreat.
Important events this week:
US PCE Deflator, Personal Expenditure, New Home Sales, University of Michigan Consumer Sentiment, Friday
Russia’s invasion of Ukraine hits the one-year mark on Friday
Some of the key movements in the markets:
Shares
S&P 500 futures were little changed as of 6:31 am London time. The S&P 500 rose 0.5%
Nasdaq 100 futures fell 0.2%. The Nasdaq 100 rose 0.9%
Euro Stoxx 50 futures up 0.4%
Japan Topix Index up 0.7%
South Korea’s Kospi index fell 0.6%
Hong Kong’s Hang Seng index fell 1.2%
China’s Shanghai Composite Index fell 0.5%
Australia’s S&P/ASX 200 index rose 0.3%
currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0601
The Japanese yen was little changed at 134.62 per dollar
The offshore yuan fell 0.3% to 6.9382 per dollar
The British pound was little changed at $1.2024
cryptocurrencies
Bitcoin was little changed at $23,864.07
Ether was up 0.2% to $1,649.05
Bind
raw materials
West Texas Intermediate crude was up 0.8% to $75.99 a barrel
Spot gold rose 0.2% to $1,825.46 an ounce
This story was created with the support of Bloomberg Automation.
–Assisted by Rob Verdonck, Richard Henderson and Matthew Burgess.
Most Read by Bloomberg Businessweek
©2023 Bloomberg LP